This is a strategy many seasoned traders use because it captures decay. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. Given the way analysts feel about NVIDIA right now, this huge implied volatility could mean there’s a trade developing. Over the last 30 days, the Zacks Consensus Estimate for the current quarter has decreased from $1.41 per share to $1.40. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.Ĭlearly, options traders are pricing in a big move for NVIDIA shares, but what is the fundamental picture for the company? Currently, NVIDIA is a Zacks Rank #3 (Hold) in the Semiconductor - General industry that ranks in the Bottom 4% of our Zacks Industry Rank.
It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. Implied volatility shows how much movement the market is expecting in the future. That is because the $265 Put had some of the highest implied volatility of all equity options today.
Investors in NVIDIA Corporation NVDA need to pay close attention to the stock based on moves in the options market lately.
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